Adopting a rules-based planning system will help solve the UK housing crisis

Sunday, 25 November 2018

A new report published by the Legatum Institute together with Create Streets recommends a move towards a clear rules-based system to standardise planning approvals across the UK and build more and better homes more quickly, to address the housing crisis.

The report, entitled More Good Homes, outlines proposals to build more homes by introducing certainty, accountability and powers that remove anti-competitive barriers to entry and permit the construction of homes that people like, in walkable and popular urban areas backed by popular support.

The report sets out a vision for planning by 2030 that would end the bespoke process of discretionary decision-making and move democracy upstream to an essentially free market model, properly regulated and politically acceptable to the broad centre on the left and right that increases the supply of better quality housing.

The UK now has the lowest proportion of young homeowners since 1926 due to the unaffordability cost of housing and rising rent which accounts for 30% of their income, and 40% in London. Our inefficient planning system in Britain is depressing the supply of new homes whilst inflating prices, resulting in a crisis of affordability, particularly for the younger generation.

The lack of certainty about what will be approved by different councils and the costly, time consuming planning process is discouraging landowners from selling land for development and fuelling an uncompetitive market dominated by large housebuilders who alone have the resources to navigate the process. The once vibrant smaller builders and self-builders have been shut out, with only 10% of homes now custom or self-built in the UK versus a European average of 50%.

The report recommends a clear rules-based system using a mixed-use zoning approach that brings predictability and a national standard to a lot of planning approval for most developments. In turn, this would free up the limited resources of planning officers to focus on the complex and controversial developments that do require development control.

Baroness Philippa Stroud, CEO of the Legatum Institute said:

“Expensive housing and much higher rents have become the biggest drain on disposable income and this is increasing poverty levels among the younger generation. Providing more affordable homes is critical to UK prosperity.”

Secretary of State for Housing, Communities and Local Government Rt Hon James Brokenshire MP said:

“This paper asks important questions on how we maintain an efficient and collaborative market to build the type of homes that people like, whilst maintaining popular and political support. We have strengthened the rules-based approach to planning through the publication of our updated national rule book, but I welcome the challenge on what more we should do to provide greater clarity and certainty. Building more homes better and faster to meet our country’s needs is our absolute priority.”

“This report sets out a vision for planning by 2030 that would replace an odd and inefficient discretionary planning process with a far more efficiently regulated model within which the free market, the third sector and local councils can all build housing more readily. This can be politically acceptable to the broad centre on the left and right. There is much evidence from other countries, and indeed from history, that this would generate cheaper, better housing and greater prosperity”.

The foundation

The Legatum Institute Foundation is a registered charity (number 1140719), and a company limited by guarantee and incorporated in England and Wales (company number 7430903), registered address 11 Charles Street, London, W1J 5DW